A small reduction in a country’s growth rate is a concern to policymakers because a. this leads to deflation, which makes people feel worse off. b. a reduction usually leads to future reductions until finally the economy stagnates. c. policymakers focus too much on economic growth and not enough on increasing savings rates. d. a small change can have large effects on per capita GDP over time.

A small reduction in a country’s growth rate is a concern to policymakers because

a. this leads to deflation, which makes people feel worse off.

b. a reduction usually leads to future reductions until finally the economy stagnates.

c. policymakers focus too much on economic growth and not enough on increasing savings rates.

d. a small change can have large effects on per capita GDP over time.

 

answer:

b. a reduction usually leads to future reductions until finally the economy stagnates.

Reaon

Slow growth may lead to slow growth in future years, thus the growth decreases and unemployment rises and this leads to stagnation of the economy.

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